Forfeiture under sales tax law applies only to tax collected in breach of the statute, not to non-taxable collections.

Amounts collected by a registered dealer on transactions not liable to sales tax did not fall within section 18(3) of the Mysore Sales Tax Act, 1957. The provision applies only where tax is collected in contravention of section 18(1) or (2), or where a dealer collects tax in excess of the amount payable. A collection outside the scope of the taxing levy is not brought within the forfeiture machinery merely because it is improper or unauthorized. The demand notices for forfeiture were therefore unsustainable, and the constitutional challenge to section 18(3) did not require adjudication.

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Issues: Whether amounts collected by a registered dealer, in respect of transactions not exigible to sales tax, fell within section 18(3) of the Mysore Sales Tax Act, 1957 so as to justify forfeiture and recovery by the Revenue.

Analysis: Section 18(3) applies only when a person collects an amount by way of tax in contravention of section 18(1) or (2), or when a registered or licensed dealer collects tax in excess of the amount payable. The collection in question was not a collection of tax on a taxable transaction at all, because the underlying sales were not liable to sales tax. A collection that is outside the scope of the taxing provision does not amount to a contravention of section 18(1) merely because it is improper or unauthorized. The forfeiture machinery could not therefore be invoked, and the constitutional challenge to section 18(3) did not require adjudication.

Conclusion: The collections did not attract section 18(3), and the impugned demand notices were unsustainable.

Final Conclusion: The Revenue could not recover the disputed sums under the forfeiture provision, and the writ petitions succeeded.

Ratio Decidendi: Forfeiture under section 18(3) can be imposed only on amounts collected by way of tax in contravention of the statutory conditions, and not on collections that are merely unauthorized but fall outside the tax liability altogether.

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